Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1.) Using the EOQ mode, Apple Baby Corporation computed the economic order quantity for one of the products it sells to be 4,000 units. Apple

1.) Using the EOQ mode, Apple Baby Corporation computed the economic order quantity for one of the products it sells to be 4,000 units. Apple Baby Corporation maintains safety stock of 300 units. The quarterly demand for product 10,000 units. The order cost is P200 per order. The purchase is 10,000 units. The order cost is P200 per order. The price of the product is P2..40

The company sells at a 100% markup. The annual inventory carrying cost of 25% of the average inventory level.

A.) What is the annual inventory carrying cost?

B.) What is the total inventory order cost per year?

2.) Bank Drugs sells Jami Michelle lipstick. The Jami Michelle Company offers a 6% discount on orders of at least 500 tubes, a 10% discount on orders of at least 1,000 tubes, a 12% discount on orders of at least 1,800 tubes and a 15% discount on orders at least 2,500 tubes.

Bank sells an average of 40 tubes of Jami Michelle lipstick weekly. The normal price paid by Bank drugs is $1 per tube. If it costs Bank $30 to place an order, and Bank's annual holding cost rate is 27%, determine the optimal order policy for Bank Drugs.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Accounting

Authors: Jill Collis, Andrew Holt, Roger Hussey

3rd Edition

113752149X, 9781137521491

More Books

Students also viewed these Accounting questions